U.S. stock futures stall amid earnings

Costco Wholesale, True Religion Apparel, Chevron among movers

KateGibson

NEW YORK (MarketWatch) — U.S. stock futures were nearly unchanged on Wednesday as investors considered corporate earnings and looked to the Federal Reserve’s Beige Book of regional economic conditions.

Given most equity strategists have been warning of poor third-quarter earnings for some time, the first down reporting season since late 2009 is unlikely to be a shock to Wall Street, said Jack Ablin, chief investment officer at BMO Private Bank in Chicago. Read: Brace for worst earnings since recession rebound.

“Companies have been guiding their outlooks down and I’m hopeful that now the first negative quarter in earnings since who knows when that we’ll be able to jump over the limbo stick because it’s so low,” Ablin said.

Alcoa earnings top estimates

(3:59)

Alcoa kicked off earnings season with positive news, beating EPS and revenue estimates.

Futures on the Dow Jones Industrial Average
US:DJZ2
fell 22 points to 13,390, while those for the Standard & Poor’s 500 index
US:SPZ2
fell half a point to 1,435.50. Futures for the Nasdaq 100 index
US:NDZ2
rose 1.25 point to 2,735.25.

The aluminum group late on Tuesday unofficially kicked off earnings season by reporting a third-quarter loss but adjusted earnings and sales that topped analysts’ forecasts. The shares fell in premarket action. Read: Alcoa swings to 3rd-quarter loss on charges

Alcoa also cut its 2012 global aluminum forecast, citing a slowdown in China, hitting industrial such as Japanese steelmakers hard. The Nikkei Stock Average
NIK, +1.23%
fell 2%.

Data points

On the U.S. economic front, wholesale inventories for August are due for release at 10 a.m. Eastern time. More attention will fall on the Fed’s Beige Book report on economic conditions due for release at 2 p.m. Eastern.

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The previous Beige Book reported that economic activity continued to expand gradually in July and early August across most regions and sectors and that employment was stable or growing slightly. Economists at Nomura said Wednesday’s report should report a slightly better picture of current conditions.

U.S. stock markets closed near session lows Tuesday as traders got jittery ahead of Alcoa’s results and after the International Monetary Fund cut its global-growth outlooks. The Dow Jones Industrial Average
DJIA, +0.72%
sank 110.12 points, or 0.8%, on Tuesday to close at 13,473.53. The S&P 500 index
SPX, +0.59%
dropped 1% and the Nasdaq Composite
COMP, +0.50%
tumbled 1.5%.

Stocks in action

Shares of True Religion Apparel Inc.
US:TRLG
shot up in premarket trade after the company said it was exploring a possible sale of the company, along with other strategic alternatives.

Yum Brands Inc.
YUM, +0.20%
shares rose after the fast-food-restaurant operator lifted its full-year per-share target to a growth rate of at least 13% late the prior day.

Warehouse retailer Costco Wholesale Corp.
COST, +1.34%
said fiscal-fourth-quarter net income rose a stronger-than-expected 27% as both net sales and total revenue moved 14% higher.

Shares of Chevron Corp.
CVX, +0.56%
declined after the oil company said it expects third-quarter profit to fall sharply from the prior quarter, with production taking a hit from Hurricane Isaac. Read more on Chevron's warning

Shares of Wells Fargo & Co.
WFC, -0.26%
fell late in Tuesday’s session after a lawsuit against the bank was filed by the U.S. Attorney for the Southern District of New York, which said the bank acted recklessly over mortgage issuance. Wells Fargo denied the allegations and said it would vigorously defend itself. See: U.S. sues Wells Fargo

Apple Inc.
AAPL, +1.63%
could see pressure after breaking through a key technical level the prior day. The shares fell as low as $623.55 a share on Tuesday, closing down 0.4% at $635.85. Read: Has Apple lost it?

Toyota Motor Corp.
TM, +0.14%7203, +0.27%
issued a recall for 7.4 million vehicles around the world due to problems with power windows. That includes 2.47 million vehicles recalled in the U.S., 1.4 million in China and 1.39 million in Europe. Read more on Toyota's recall

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